Exercise 163 Work in ProcessPainting LINK TO TEXT LINK TO TE

Exercise 16-3

Work in Process—Painting

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Open Show Work

Exercise 16-3 The ledger of American Company has the following work in process account. Work in Process—Painting 5/1 Balance 3,890 5/31 Transferred out ? 5/31 Materials 5,840 5/31 Labor 2,630 5/31 Overhead 1,780 5/31 Balance ? Production records show that there were 530 units in the beginning inventory, 30% complete, 1,760 units started, and 1,540 units transferred out. The beginning work in process had materials cost of $2,440 and conversion costs of $1,450. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Solution

1 Work in process, May 31 = 530+1760-1540= 750 2 Equivalent units for materials = 1540+750= 2290 The unit materials cost for May =(5840+2440)/2290= 3.616 3 Equivalent units for conversion = 1540+(750*40%)= 1840 The unit materials cost for May =(2630+1780+1450)/1840= 3.185 4 The total cost of units transferred out in May=1540*(3.616+3.185)= 10474 5 Work in process =(750*3.616)+(750*40%*3.185)= 3668